No “Embargo” Around Here, Folks

Don’t miss the article by Howard Blume, School Cost Is Record for L.A. Unified, L.A. Times, Jul. 14, 2010, at p. AA1, reporting that after some quarter of a century of shilly-shallying, the Los Angles Unified School District has announced that the new complex of schools it is building in the mid-Wilshire area of Los Angles (on the site of the former Ambassador Hotel — the erstwhile home of the Coconut Grove and the site of assasination of Senator Bobby Kennedy) has added another dollop of projected expenditures for this project — another $6.6 million for a grand total so far of  $578 million.

Last time we looked, the record for such stuff was held by the “Belmont Educational Center,” a downtown Los Angeles high school that had been built — oops! — on top of an abandoned oil field without taking the precaution of sealing its underside against methane leakage, so it could not be used as a school in spite of an expenditure of some $217 million, last time we looked. Oh well, easy come — easy go. After all, it’s only your money. But we digress.

When it comes to the Ambassador Hotel site, we feel intimidated trying to describe the background of this land acquisition saga, but if you are made of sturdy stuff, we recomment that you read the on-again, off-again, on-again adventures and misadventures of this project, in California Court reports. It was on-again, when the School District filed an eminent domain action to take the site from Donald Trump — yep, that Domald Trump — and deposited $47.919 million, whereas “The Donald” was thinking around $200 million. See L.A. Unified School Dist. v. Trump Wilshire Associates, 42 Cal.App.4th 1682 (1996).

That was too rich for the District (which, as it happens, claimed to be unable to maintain the site pending condemnation, and for that reason did not use a quick-take procedure). So the District prudently abandoned the condemnation and dismissed the eminent domain action. But by then Trump split, having paid off his loan with the withdrawn funds that had been deposited by the District, and sold his interest. The remaining owners whose prospects of development had gone south in the meantime because of a decline in the economy, and because of local riots, tried to keep the District from abandoning, but the court said nothing doing, because the owners had not changed their position irrevocably in reliance on the eminent domain action. See See L.A. Unified School Dist. v. Wilshire Marketplace, 89 Cal.App.4th 1413 (2001).

But some time later, the District changed its mind, acquired the site after all, and proceeded with the construction. There is much to tell about that one, and perhaps one of these days we’ll take a deep breath, down a stiff drink and have at it. But not right now.

The point of this post, is to remind our readers that Los Angeles is in California, the home of the California Supreme Court which has held that in spite of flowery, idealistic judicial language about fairness, justice and indemnity, it’s that court’s policy to keep eminent cdomain awards low, not necessarily just. Condemnees don’t get paid for all  demonstrable economic losses inflicted on them by condemnation, and that if we were we to do that, “an embargo” — yessir, an embargo — on public project would have to be declared.

But it turns out that even in the depths of the Great Recession of 2008, there does not appear to be an embargo on the construction of “the Los Angeles Unified School District’s most expensive school project, now surpassing $578 million.” 

For the L.A. Times story go to:,0,2788053.story

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